If you want to have a passive experience as a real estate investor, one of the most important things you can do is hire a great property management team. In this Ultimate Guide to Property Management for Real Estate Investors, I’m going to share some of best tips I’ve learned in my investing career.
We’re going to cover the major benefits of working with a property management company, how to find the right property manager, key questions to ask in order to make sure it’s a fit for everyone, tips for effective communication, and so much more. Click play to learn more!
More About This Show
Property management is a full-time job. I’m guessing you didn’t get into real estate investing to suck up all your free time, right? Adding in another job for yourself is probably not going to help you live the life that you want. A great property management team can save you time, money, take care of your property, and help you keep high quality tenants longer. Most property managers are going to charge you a percentage-based fee, so somewhere in the range of 6-10% of your monthly rent.
Unless you live near your property, know a lot about maintenance, management, vacancies, marketing, and more… it’s probably best to hire out for the job. Trust me. Especially if you plan on scaling your real estate business, it’s a good idea to have an effective property management company on your team.
Let’s start from the beginning – hiring. How do you hire a property management company? I think the best way is by referral, but I understand that’s not always an option. So if you’re starting from zero, you’ll have to do some research. Read reviews online, make some phone calls, get quotes, and set up meetings. Select a handful of companies that you’d like to interview.
Here are the best questions to ask during those interviews:
- What is your tenant screening process like?
- What is the background check process like?
- What is your monthly fee, and what other types of fees could arise?
- What is your preferred communication method? And when can I expect a response from you?
- What is your tenant turnover process?
- What role do you play in the event of an eviction?
- What is your vacancy rate?
- Is there anything you think I should know about this market?
And from those interviews, here’s what I like to see, personally:
- Timely and effective communication. A great property management team needs to be comprised of strong communicators. Remember that this team will essentially be your tenant’s customer service team, so you want to ensure they’re kind, will respond to requests in a timely manner, and are pleasant to work with.
- Thorough background check process. You want your property management team to comb through everything during a background check: credit, criminal background, employment, and more. They should be able to provide you with a full picture of the tenants they screen.
- Plenty of experience in the market, along with a strong awareness of things like vacancy rates and local employment.
- Reasonable vacancy rates that are consistent with what’s normal for that market.
- Pricing consistent with the market rates.
- Fair pricing and frequency when it comes to fees.
- Proactive approach. Listen, I’m busy and I bet you are too. I like to work with a property management team that is taking a holistic approach – do they have my best interests in mind? Are they looking out for the well-being of my tenant? An excellent property manager is proactive in taking care of everything on site.
And finally, here are my tips for building a strong relationship with your property management team:
- Check in regularly. They should know you by name and expect to hear from you on a regular basis.
- Don’t be annoying! You want to establish a strong relationship, but don’t try to micromanage your property management team.
- Trust their judgment. If you were thorough in selecting a property management company, then you should trust their expertise. If they suggest a certain rate or policy, you should follow their guidance.
- Be timely when they ask you to approve requests or fill out paperwork.
- Always be respectful! As I said at the top, your property management team is foundational to your success as a real estate investor, so be a client they like to work with!
At Morris Invest, we interview property management teams during our market research process. What this means for our clients is that we send them a list of our approved property managers to choose from. Of course, this doesn’t excuse anyone from doing their own due diligence, but it certainly helps narrow things down.
If you’re interested in investing in done-for-you real estate, come on over to our website, morrisinvest.com. You can schedule a free call with us to learn more about our markets, our programs, and our streamlined process for helping investors like you build wealth.
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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